Big trade sees cap on EEM despite pop
Chris McKhann | firstname.lastname@example.org
The EEM is up 2.6 percent to $39.75. The exchange-traded fund faces technical resistance at $40 that it has tested on three occasions since gapping down through that level back in mid-May. Shares were trading above $44 goint into March.
A trader sold 24,421 September 41.50 calls for $0.57, below the bid price at the time, according to optionMONSTER's systems. Volume at the strike was twice the open interest in the strike at the beginning of the day, so this is a new position.
The call selling is a bet that the EEM won't be much above that strike level by the September expiration. The contracts may very well have been sold against long shares in a covered call trade, which would be mildly bullish but forego any stock gains beyond above the strike price. (See our Education section)